Singapore Air back to 90% capacity

BLOOMBERG

Sun, Jul 27, 2003 - Page 11

Singapore Airlines Ltd, Asia's biggest carrier by market value, plans to fly almost 90 percent of its capacity as increased travel demand prompts it to restore flights canceled during the SARS outbreak.

The airline cut 30 percent of its capacity, a measurement of the seats available and distance flown, between April and last month after the passengers it carried fell by as much as three-fifths.

"As demand comes back, we have begun to put some of our flights back," Singapore Air Chairman Koh Boon Hwee said at a shareholder meeting. "Going forward, compared to the pre-SARS period, it's likely we'll still be in the range of between 12 and 15 percent down [in capacity] for the foreseeable future."

Singapore Air, Cathay Pacific Airways Ltd and other Asian carriers are starting to recover from the slump caused by SARS, which led to the cancelation of 1,150 weekly flights at the peak of the outbreak.

Singapore Air had an operating loss of S$370 million (US$211 million) for April and May.

The airline can't determine when all of its capacity would be operating, Koh said. The carrier cut ticket prices by as much as half to lure travelers back.

Hong Kong's Cathay Pacific last month said it will probably resume a full flight schedule by the end of September.

Singapore Air today passed a resolution removing limits on the number of share options it can give to senior executives.

It won 64 percent of the votes on the resolution, which also led to comments by some shareholders who wanted to remove the award of stock options, or to attach performance-related conditions to the award.

Former stock broker Narayana Narayana said a rising stock market can reward management and employees, helping them to exercise and sell their options at a profit, even though their performance doesn't merit it.

Koh also reiterated that the airline is still considering whether it wants to start its own no-frills carrier.

Singapore Air is conducting a feasibility study to combat low-priced competition from Malaysia's Air Asia and Australia's Virgin Blue Airlines.